Best Bank for Home Loans in India

#1. State Bank of India Home Loan

If the property you intend to purchase gets a loan approved by SBI, be assured that the property papers are legitimate and you would face no legal hassles in future as SBI has one of the most stringent property verification measures.

The bank offers loan for house purchase, house construction, home renovation as well as Top-up home loans.

The interest rates are usually at the lower range as compared to other lenders.

The interest is charged on daily reducing balance i.e. the principal is recalculated at the end of every day and the interest charged accordingly. If you make a part-payment today, the interest outgo on your loan reduces starting from the very next day.

Unique Offering

SBI MaxGain Home loan is their flagship product in which you can keep your surplus cash in a savings account linked to the loan account.

This amount will be considered as principal paid and hence, interest outgo will be reduced.

Fixed Interest Rate

None

Floating Interest Rate

8.7% – 9.1%

MaxGain interest rate (Overdraft Loan interest rate)

8.75% – 9.45%

Processing Fees

Up to Rs. 10,000

Maximum Tenure

30 years

Pre-closure Charges

Nil

LTV

90% for – < Rs. 20 lakhs 80% for – > 20 lakhs

Part-Payment Charges

Nil

Advantages

Stringent assessment of property

Transparent charges

Calculation of interest on the daily-reducing balance

Drawbacks

Slow approval process

#2. ICICI Home Loan

They are well known for their simplified documentation process, speedy approvals and competitive interest rates.

They offer loans for house purchase, house construction, home renovation as well as Top-up home loans.

ICICI offers both fixed rate and floating rate home loans for properties up to Rs.5 Crores and up to 30 years loan tenure.

The interest is charged on monthly reducing balance i.e. the principal is calculated at the end of every month and the interest charged accordingly. If you make a part-payment today, the interest outgo on your loan reduces starting from the 1st of next month.

Unique Offering

ICICI gives a special reduction on the interest rate if the first applicant of the home loan is a woman. You are allowed to make your non-working, female partner as a first applicant and avail lower interest rate.

If you decide to avail floating rate home loan from ICICI, you have the option to keep the interest rate ‘Fixed’ for the initial 24 months or 36 months.

No charges for part-payment Min. part-payment should be equal to one EMI.

Advantages

Can make a non-working female partner as a co-borrower and avail reduced interest rates.

Quick processing of loans

Door-step services are available at no extra cost.

Drawbacks

EMI once increased cannot be decreased even if you have made enough part-payments.

#3. HDFC Home Loan

HDFC is known for its stringent verification of the property documents.

It also provides door-step services and has an easy application & documents submission process.

The interest rates are competitive. They provide loans for house purchase, house construction, home improvement, and home extension.

Unique Offering

HDFC does not offer a fixed rate home loan. Instead, it offers “TruFixed” Loan in which you have the option to keep the interest rate ‘Fixed’ for an initial 24 months.

It also offers Multiple types of repayment options to choose from:

A. Step Up Repayment Facility (SURF): SURF offers an option where the repayment schedule is linked to the expected growth in your income.

You can avail a higher amount of loan and pay lower EMIs in the initial years and increase the EMI after every few years as income increases.

B. Flexible Loan Installments Plan (FLIP): In FLIP, the loan is structured in such a way that the EMI is higher during the initial years and subsequently decreases in proportion to the income.

C. Tranche Based EMI: If you have purchased an under-construction property, instead of paying only the interest on the loan disbursed, you can actually start paying the full EMIs i.e. the EMI amount after you get the entire loan amount disbursed.

D. Accelerated Repayment Scheme: This option provides you with the flexibility to increase the EMIs every year in proportion to the increase in your income which will result in you repaying the loan much faster.

E. Telescopic Repayment Option: With this option, you get longer repayment tenure of up to 30 years. This means an enhanced loan amount eligibility and smaller EMIs.

#4. Axis Bank Home Loan

Axis bank offers home loans for purchase, construction, and top up loans for amounts as small as Rs.3 lakhs.

The interest rates are competitive but the processing fees are fixed irrespective of the loan amount.

Unique Offering

For one of their home loan products – Fast Forward Home Loans, they offer up to 6-month EMI holiday on completion of 10 years loan tenure and another 6 months on completion of 15 years loan tenure, provided the repayment track record is clean.

Here, EMI holiday means that you can stop paying EMIs for a few pre-determined months.

#5. Dewan Housing Finance Ltd. (DHFL)

DHFL offers loans for house purchase, construction, and renovation, but not Top-up loans.

Their loan disbursement time is one of the fastest and least cumbersome.

Their property verification processes are relaxed and not too stringent. It offers only floating rate home loans. The interest is calculated on a monthly-reducing basis.

Fixed Interest Rate

Not available

Floating Interest Rate

9.0%-11%

Processing Fees

vary from Rs. 5000 – Rs. 20000 depending on the loan amount.

Maximum Tenure

30 years cannot extend beyond 60 years

Pre-closure Charges*

Nil for individuals 2% – if the loan is being refinanced

LTV

90% for loan value less than Rs. 20 lakhs 80% for loan value more than 20 lakhs

Part-Payment Charges

Part-payment is not allowed for 6 months No charges for prepayment after that.

*Pre closure charges: Nil, except in cases where co-borrower is not an individual, it is 2%.

Advantages

Not very stringent property verification process

Easy to get finance for properties which don’t have clear titles

Drawbacks

Top-up loans are not available

#6. Indiabulls Home Finance

Indiabulls offers loans for home purchase, house construction, home extension, and home renovation.

Though the processing fees are on the higher side, there are no other additional charges such as legal charges and valuation charges.

The interest is calculated on the monthly reducing balance basis.

It offers a dual-rate loan called ‘Fixed and Floating Rate Loans’ in which the interest rate remains fixed for the initial 2 years of the loan.

They are one of the preferred lenders for people who want to buy properties with incomplete documentation or an unclear path of inheritance.

Unique Offering

They have an innovative product called eHome Loans where the entire process of application, document submission, loan sanction, and loan disbursal are automated.

You have to apply for the loan online, e-Upload the required documents and electronically sign the application form. The status of the loan application can be known online and the disbursal is directly made to the bank account.

This saves you the hassle of repeated visits to the branch for application and document submission.

Fixed and Floating Interest Rate

9.25%-11.2%

Floating Interest Rate

8.8%-11%

Processing Fees

0.5%-1% for loans above Rs. 30 lakhs Rs. 10,000 for the rest

Maximum Tenure

30 years, cannot extend beyond 60 years.

Pre-closure Charges

Nil for floating rate loans For fixed-rate loans: a. Nil if paid from own sources b. 2% if refinanced

LTV

90% for loan value less than Rs. 30 lakhs 80% for loan value of more than 30 lakhs.

Part-Payment Charges

Nil

Advantages

eHome loan product is very beneficial for people who lack time for the loan formalities and branch visits.

They fund 90% of the property value if it is less than 30 lakhs.

Drawbacks

Slow processing of application and customer service not up to the mark.

#7. LIC Housing Finance Home Loan

LIC Housing Finance provides loan for house purchase, house construction, home extension as well as renovation.

Top-up loans are also available on certain conditions.

The interest is calculated on a monthly-reducing basis.

Fixed Interest Rate

Not offered

Floating Interest Rate

8.7%-9.05%

Processing Fees

0.5% of the loan up to a maximum of Rs. 10,000

Maximum Tenure

30 years, and cannot extend beyond 60 years.

Pre-closure Charges

Nil

LTV

85% for loans up to 20 Lakhs 80% for loans above 20 Lakhs and up to 75 Lakhs 75% for loans above 75 lakhs

Part-Payment Charges

Nil

Advantages

Very low-interest rates.

No charges for pre-closure or for prepayment.

Drawbacks

The entire process of loan application, approval and disbursement is done manually.

Unlike other lenders, LIC Housing finance does not give the option to view the loan details online or generate statement online.

90% for loan value less than Rs. 30 lakhs 80% for loan value of more than 30 lakhs.

Part-Payment Charges

Nil

Advantages

In case you take a loan for house construction, you can request for enhancement of the loan if the cost of construction escalates.

Drawbacks

Slow processing of applications

#9. Bank of Baroda Home Loan

Bank of Baroda offers loans at very competitive interest rates.

It offers loans for house purchase, construction, and renovation.

You can get a loan approved even before you finalize the property.

Unique Offering

Home Loan Advantage is a product where you can park your savings in a savings account linked to the loan account. The entire amount in the savings account is treated as principal paid and interest outgo is reduced.

Fixed Interest Rate

Not offered.

Floating Interest Rate

8.65% -11.25%

Processing Fees

Fixed fee of Rs. 7500

Maximum Tenure

30 years, Can extend up to 70 years subject to Ts & Cs.

Pre-closure Charges

Nil

LTV

90% for loan value less than Rs. 30 lakhs 80% for loan value of more than 30 lakhs

Part-Payment Charges

Nil

Advantages

You can enjoy a free credit card and concession of 0.25% for car loans. Additionally, we offer free accident insurance with every home loan.

You can avail loan as slow as Rs.2 lakhs.

Drawbacks

Slow processing of applications.

#10. Aditya Birla Capital Home Loan

Aditya Birla Capital offers loans for home purchase, home construction, home extension, and home improvement but not top-up loans.

They are known for speedy processing of the loan application and lower interest rates.

They also offer doorstep services in case you are unable to visit the branch.

#11. Tata Capital Home Loan

Tata Capital covers all the housing needs like loan for a home, plot and ready to move in apartments. Apart from that you can find loans for constructing a home, home extension even for house maintenance and repairs.

You can look for a home loan of Rs. 2 Lacs to Rs. 5 Crores.

You can get a maximum disbursal amount, easy repayment through flexi EMI options and also doorstep services.

The application process is online and starts with an easy form and submission of a few documents like income proof. After verification, you get a spot conditional approval online.

Otherwise, you can even walk into a branch or can call them on the phone.

Fixed Interest Rate

N. A.

Floating Interest Rate

9.25% -12%

Processing Fees

0.5% of the loan amount

Maximum Tenure

30 years

Pre-closure Charges

Nil in case of own funds 2% for others

LTV

80% of the market value

Part-Payment Charges

Nil

Advantages

Doorstep services and low-interest rates

Easy repayment through Flexi EMI option

Drawbacks

Account maintenance charges

Branches only in few cities

Tips for You When to go About Choosing a Home Loan

1. You can make a woman (either your wife or mother) as a co-borrower, and avail loan at a lesser interest rate.

2. If a property is already approved by a bank, it does not mean you won’t be charged legal fees or property verification fees.

Irrespective of the status of approval, every customer has to pay these fees if demanded by the bank. So, think before you avail loan from a lender who has already approved the project.

3. No matter how much loan-to-value the banks claim to finance, finally they will approve the amount you are eligible based on your income. The lower amount between the LTV of the property and your loan eligibility is approved.

4. If you have any existing loans such as personal loan, car loan etc., the amount of loan approved for your house purchase will be reduced

5. A good CIBIL score above 800 gives you an extra edge to negotiate for lesser interest rates. If you have lower CIBIL Score you should know how to improve CIBIL Score

6. There is always a possibility of banks valuing the property at a lesser price than what the builder has quoted. At such times, trust the bank’s valuation and renegotiate with the builder.

It may not always be beneficial as the current lender might charge you a fee (which could be a percentage of your loan) to transfer the loan balance to another lender.

8. If you are looking to refinance your home loan to a lender offering lower interest rates, it will be beneficial if it is in the initial years of the loan tenure.

If you try to refinance during the last few years of the loan tenure, it will be a loss as the amount you save on the interest will be nullified by the amount you spend towards refinancing charges, processing fees, etc.

9. Your bank will take away the original sale deed and documents immediately on registration of the property and store it with them.

Always check how and where your lender stores the property documents, and how long will it take to be retrieved after the loan is paid up. Losing your original sale documents is a big loss and may present legal challenges also.

10. Apart from the interest rates and processing charges, check about miscellaneous charges.

11. After you close the loan, it is the duty of the lender to update CIBIL about it. Ensure that the lender informs CIBIL about the closure of loan on time. If your lender fails to do so, you CIBIL score might get affected.

Final Words

Now that you know about the best home loan lenders and some good tips to choose a lender, it does not mean that every loan product is suitable for you.

Depending on your loan requirement, repayment capacity and cash flow, you should choose a home loan suitable for you.

Your lender should clearly mention about the costs that are going to be covered by the loan. Lenders usually do not finance registration and stamp duty costs, annual maintenance charges(in case of apartments) and clubhouse charges.

So, it’s important to choose a lender who will finance the amount you need and has hassle-free loan approval and repayment options.